Ali operates a small business manufacturing specialist engine filters. In November he placed an advertisement in a car trade magazine stating he would supply filters at $60 per filter. but would consider a reduction in the price, for substantial orders. He received a letter from Ben Cars Pte Ltd requesting his terms of supply for 1,000 filters.
Ali replied, offering to supply the filters at a cost of $50 each. Ben Cars Pte Ltd responded to Ali’s letter stating S vs.. they accepted his offer but they would only pay $45 per. Ali wrote back to Ben Cars Pte Ltd stating he would supply the filters but only at the original price of $50. When Ali’s letter arrived, the purchasing director of Ben Cars Pte Ltd did not notice the alteration of the price and ordered the 1,000 filters from Ali, which he supplied.
XYZ Pte Ltd (XYZ) is a fintech start and in order to expand the business, is required to purchase S$250,000 worth of computers and related accessories from ABC Pte Ltd (ABC) on credit. To ensure XYZ is financially stable to pay for the computers, ABC wanted to know XYZ’s financial stability. XYZ asked ABC to contact their Bankers BRY Bank (BRY).
ABC wrote to BRY requesting XYZ’s solvency position 35 ABC intend to provide credit to XYZ. BRY mistook ABC for another of their clients and stated that ABC are financially solvent. BR? supplied the information with the reference: ‘BRY Bank will not accept any liability for any inaccuracy contained in this reference, or for any loss incurred as a consequence.’
In January, Anu, Mei, and Julia borrowed $400,000 from ABC Bank to set up a Restaurant AMJ Cuisine (AMJ). AMJ is a fine dining restaurant specializing in exotic western cuisine. All three were directors and shareholders of the company, They also hired three staff to help run the business.
In March, all businesses in Singapore were drastically affected when the government announced a two-month lockdown of the city-state due to the Covid-19 pandemic. Even after two months, businesses were gradually reopened by sectors. Fine dining restaurants were one of the last to be opened. By that time, AMJ was on the verge of collapse with no business being done for a few months. Anu, Mei, and Julia informed ABC Bank of the financial difficulties the company is facing. The bank is now considering legal action to get back its loan.
Explain if ABC Bank would be able to hold the directors, shareholders, and/or staff liable for the $400,000 loan.